The Best Strategies for Submitting a SEC Whistleblower Tip

The SEC Whistleblower Program, established under the Dodd-Frank Act, is designed to encourage individuals to report securities law violations. Whistleblowers should develop a concrete understanding of the rules and guidelines set forth by the SEC for whistleblowers.

When submitting a tip, whistleblowers should first learn about the criteria for eligibility and the types of violations the SEC investigates. They should also learn about the newer types of violations the SEC monitors, such as those involving digital assets.

To learn more about the SEC Whistleblower Program, we recommend reading the Rules for Whistleblowers – Rule 19 and Rule 20 – to get a complete overview of the program.

The SEC requires that whistleblowers provide detailed, specific, and credible information to support their allegations. This may include internal documents, emails, or other records that point to a direct violation of securities laws. The more concrete and verifiable the evidence, the better a whistleblower’s chances of qualifying for an award.

It’s important that the information provided by a whistleblower is accurate, complete, and original. If the whistleblower leaves essential fields blank or provides incorrect information, the Office of the Whistleblower might reject their submission.

Whistleblowers must use the SEC’s Form TCR (Tip, Complaint, or Referral) to submit their allegations. These tips must be thorough and accurate in providing all required information. Whistleblowers must describe the misconduct in detail, including names, dates, locations, and the securities laws they believe were violated.

Do’s:

1. Provide Detailed Information: whistleblowers must clearly outline their observations, providing as much detail as possible. This include dates, names, places, how the violation occurred, and any other crucial details.
2. Use the Correct Form: It may sound like a silly point to make, but whistleblowers must be sure to use the correct form, which is the TCR form. This form can submitted online, by mail, or faxed.
3. Check for Accuracy: Whistleblowers should review their submission over and over for accuracy before submitting. They should ensure all facts, dates, names, and other details are complete and correct.
4. Sign the Form: A signed form is mandatory. Without a signature, a form may be rejected.
5. Maintain Confidentiality: If you wish to remain anonymous, whistleblowers should not provide identifying information in their complaint. It’s advised that whistleblowers engage an attorney to submit the form on their behalf.

Don’ts:

1. Leave Sections Blank: Incomplete information may lead to a form being rejected. Whistleblowers must fill out every necessary field, and if a field does not apply to their situation, mark it as N/A or “not applicable.”
2. Submit Without Reviewing: Whistleblowers must make sure to double-check their information before submitting.
3. Submit Non-Original Information: The SEC requires original information not already known to them and not derived from publicly available sources.
4. Ignore Instructions: Carefully read and follow all instructions on the form.
5. Include Unnecessary Details: While thoroughness is crucial, the form should be free of irrelevant details.

The effectiveness of a TCR submission often depends on the quality and accuracy of the information provided.

Whistleblowers who decide to file anonymously must do so with the help of an attorney. Preferably one with intimate knowledge of the SEC Whistleblower Program. Whistleblowers must still complete Form TCR, but their attorneys submit it on their behalf without disclosing their identity.

There are also many more reasons why a whistleblower should hire an attorney besides filing forms and being of sound counsel. For example, the Commission might dismiss the case entirely due to a missed deadline or the absence of crucial information. An attorney can work to safeguard whistleblowers from retaliation and collaborate with the SEC to uphold their right to whistleblower protection.

Once a whistleblower submits their tip, the SEC may request additional information or assistance during their investigation. Whistleblowers must be proactive and cooperate fully to demonstrate their commitment to the case.

Whistleblowers may be asked to provide additional information about the case, identify relevant documentation, participate in interviews, identify witnesses, assist with litigation, and more.

From the time a tip is submitted to when an enforcement action is taken, it can take several years. Even after an enforcement action is successful, it might take additional time for the SEC to determine if a whistleblower award is warranted and to calculate the amount of the award.

Whistleblowers should maintain a copy of their Form TCR submission and any supporting documentation and records of their communications with the SEC. This documentation will be necessary to support their claim for an award.

Whistleblowers should never use company devices to store documents or use the company internet to transmit sensitive information. Failure to be discreet may result in harsh retaliation by the company.

Here are some measures that can help secure a whistleblower’s identity:

1. Use a VPN: A Virtual Private Network (VPN) can hide an IP address, making it harder for someone to track.
2. Use Anonymous Email Services: There are email services that allow anonymous emails. Make sure to use a reputable service that does not store logs.
3. Avoid Personal or Work Devices and Networks: Whenever possible, avoid using devices or networks. Public computers or networks can provide more anonymity.
4. Use Anonymous Browsing: Tools like Tor Browser can help mask online activity.
5. Encrypt Communications: Use encrypted email services or secure messaging apps for communication.
6. Engage Legal Help: If possible, engage an attorney who specializes in whistleblower cases. They can guide you on the best practices to maintain anonymity and can submit the form on your behalf to the SEC or other relevant bodies.
7. Follow Instructions from Whistleblower Programs: The SEC and other organizations often provide specific instructions on how to report violations anonymously. Make sure to follow these instructions carefully.

Remember, while these steps can significantly enhance anonymity, no method is completely foolproof. Always be cautious when handling sensitive information, and consider seeking professional advice if you’re unsure.

The length of an SEC whistleblower case can vary significantly depending on the investigation’s complexity, the evidence’s availability, and the level of cooperation from involved parties.

These cases may take 2 to 5 years or even longer to reach a resolution. Some cases may be resolved quickly if the SEC can gather sufficient evidence. In contrast, others may take considerable time due to their intricate nature or difficulties obtaining the necessary information.

The whistleblower may be eligible for an award when the SEC takes successful enforcement action resulting in monetary sanctions of over $1 million based on the information provided. Submit a completed Form WB-APP to apply for an award.

Remember, while these steps can help improve a whistleblower’s chances of qualifying for an award, there are no guarantees. The SEC has discretion in determining award amounts and eligibility; not all whistleblowers will receive compensation.